On May 30, 2007, the Company executed a $575,000 promissory note payable to a director of the Company. This note was amended on July 1, 2009 and again on January 2, 2010. As amended, the note carries an interest rate of 8% per annum. All principal is payable in full, with accrued interest, on January 2, 2011. On November 2, 2007, the Company issued 12,074 shares of its Series B Preferred stock valued at $28,975 as payment towards this loan. The loan grants to the holder a security interest in the accounts receivable of the Company up to the amount of the unpaid Principal.

On July 12, 2011 Stewart Wallach, the Chief Executive Officer and Director of CHDT and JWTR Holdings, LLC owned by a Director, Jeffrey Postal entered into a Securities and Notes Purchase Agreement with Howard Ullman, the previous Chairman of the Board of CHDT, whereby they would purchase equally all of Howard Ullmans notes including the subordinated notes net of any offsets, monies due by Howard Ullman to the Company. The original terms of all notes would remain the same. On July 12, 2011 this note payable was reassigned by Howard Ullman, equally split between Stewart Wallach Director and JWTR Holdings LLC. The note balance of $466,886 was reduced by $47,940 for offsets due by Howard Ullman. The revised loan balance of $418,946 was reassigned equally $209,473 to Stewart Wallach and $209,473 to JWTR Holdings LLC. At December 31, 2011, the total amount payable on the reassigned notes to Stewart Wallach was $216,498 which includes accrued interest of $7025 and JWTR Holdings, LLC was $216,498 which includes accrued interest of $7,025. For the revised notes the interest payments are being accrued monthly to the note holders.

On July 11, 2008, the Company received a loan from a director of $250,000. As amended, the note is due on of before January 2, 2013 and carries an interest rate of 8% per annum. At December 31, 2011, the total amount payable on this note was $290,000 including interest of $40,000

As part of this note payable, the Company also issued a warrant to the loan holder to purchase 4,000,000 shares of common stock at a price of $.025 per share. At the date of issuance, the stock price was $.021 per share. The Company accounted for the debt and warrants using APB 14, whereby the proceeds of $250,000 were allocated between the debt and warrants. This resulted in the warrants being valued at $56,375, which was recorded as additional paid-in capital, and a discount on the note of $56,375 being recognized. The discount was amortized over the term of the note (6 months) to interest expense. At December 31, 2008, the discount had been fully amortized resulting in interest expense of $56,375 being recognized.

On March 11, 2010, the Company received a loan from a director of $100,000. As amended, the note is due on or before January 2, 2013 and carries an interest rate of 8% per annum. At December 31, 2011 the total amount payable on this note was $114,466 including interest of $14,466.

On May 11, 2010, the Company received a loan from a director of $75,000. As amended, the note is due on or before January 2, 2013 and carries an interest rate of 8% per annum. The loan grants to the holder a security interest in the accounts receivable of the Company up to the amount of the unpaid Principal. At December 31, 2011 the total amount payable on this note was $84,847, including interest of $9,847..

On June 11, 2010, the Company received a loan from a director of $150,000. As amended, the note is due on or before January 2, 2013and carries an interest rate of 8% per annum. The loan grants to the holder a security interest in the accounts receivable of the Company up to the amount of the unpaid Principal. At December 31, 2011 the total amount payable on this note was $168,674 including interest of $18,674.

During the quarter ended June 30, 2008, the Company executed three notes payable for a combined total of $200,000 to an officer of the Company. As amended, the notes are due on or before January 2, 2013 and carry an interest rate of 8% per annum. These loans grant to the holder a security interest in the accounts receivable of the Company up to the amount of the unpaid Principal. At December 31, 2011 the total amount due on these notes was $232,000, including interest of $32,000.

On July 16, 2007, Capstone Industries executed a $103,000 promissory note payable to a director of the Company. As amended, the note carries an interest rate of 8% per annum and is due on or before January 2, 2013. In December 2008, the Company borrowed an additional $75,000 from this director. As amended, this note is due on or before January 2, 2013. These loans grant to the holder a security interest in the accounts receivable of the Company up to the amount of the unpaid Principal.

At December 31, 2011 the total amount due on these notes was $208,232, including interest of $30,232. For the year 2011 the interest payments were paid monthly to the note holder as of July 31, 2011.

During the First Quarter 2010, Capstone Industries, Inc. received a $92,000 loan from Systematic Development Group, LLC. The loan was due on or before Dec 15, 2010 and carried an interest rate of 1.5% simple interest per month (18% annual). This loan was paid in full as of December, 31, 2010.

During Second Quarter 2010, Capstone Industries, Inc. received an additional $445,000 loan from Systematic Development Group, LLC. The loan was due on or before Dec 15, 2010 and carried an interest rate of 1.5% simple interest per month (18% annual). This loan was paid in full as of December, 31, 2010

During Third Quarter 2010, Capstone Industries, Inc. received an additional $714,000 loan from Systematic Development Group, LLC. The loan was due on or before January 14, 2011 and carried an interest rate of 1.5% simple interest per month (18% annual). The loan granted to the holder a security interest in the inventory purchased pursuant to this agreement until sold, with payment due immediately on advancement of funds from Sterling Factors Corp. At December 31, 2010, the total amount due on this note was $78,625 including accrued interest of $3,625. This loan was paid in full as of March 31, 2011.

On October 4th 2010, Capstone Industries, Inc. received an additional $114,000 loan from Systematic Development Group, LLC and carried an interest rate of 1.5% simple interest per month (18% annual). This loan was paid in full at December 31, 2010.

Stewart Wallach, the Company’s Chief Executive Officer and President, was a 65% owner of Systematic Development Group, LLC. at the time the loans were executed.

On June 24, 2010, Capstone Industries, entered into a Purchase Order Funding agreement with a director. The agreement provides for loans from the director up to $682,730, with a due date of December 31, 2010, carried a simple interest rate of 1.5%% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale thereof (second position to Sterling Capital Funding). As amended, the note was due on or before March 31, 2011. On June 25, 2010, the Company received $265,000 pursuant to the agreement. During the third quarter 2010, the Company received additional funding of $415,000. During 2010, this note was partially repaid in the amount of $604,605 including $24,605 interest. At December 31, 2010 the total amount payable on this note was $104,882 including accrued interest of $4,882. This loan was paid in full as of March 31, 2011.

On July 21, 2010, the Company entered into a Purchase Order Funding agreement with Everett Fleisig. Mr. Fleisig is the father in law of an officer of the company. The agreement provided for loans up to $356,000, with a due date of December 31, 2010, carried a simple interest rate of 1.5% per month (18% annual), and was secured by the product purchased and accounts receivable from the sale of thereof (second position to Sterling Capital Funding). As of December 31, 2010 the total note amount of $217,513 was repaid in full including interest of $8,513.

On November 29, 2010, the Company entered into a Purchase Order Funding agreement with Rossion Holding LLC (RHL). The agreement provides for loans up to $140,000, with a due date of April 30 2011, carries a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale of thereof (second position to Sterling Capital Funding). On December 1st, 2010, Company received $47,000 pursuant to the agreement. As of June 30, 2011 this note was paid in full.

On December 9, 2010, the Company entered into a Purchase Order Funding agreement with Rossion Holding LLC (RHL). The agreement provides for loans up to $600,000, with a due date of June 30 2011, carries a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale of thereof (second position to Sterling Capital Funding). As December 31, 2010 the note payable was $101,134 includes accrued interest of $1,134, which was paid off as of March 31, 2011. During the First Quarter 2011, an additional loan of $409,000 was received. As of June 30, 2011 this note waspaid in full.

On December 9, 2010, Capstone Industries, entered into a Purchase Order Funding agreement with a director. This agreement provides for loans from the director up to $350,000, with a due date of June 30, 2011, carried a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale thereof (second position to Sterling Capital Funding), On December 9, 2010, the Company received $350,000 pursuant to the agreement. At December 31, 2010 the total amount payable on this note was $353,797 including accrued interest of $3,797. This loan was paid in full as of March 31, 2011

On March 17, 2011, Capstone Industries, entered into a Purchase Order Funding agreement with a director. This agreement provides for loans from the director up to $800,000, with a due date of December 31, 2011, carries a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale thereof (second position to Sterling Capital Funding). As of June 30, 2011, the Company received $450,000 pursuant to the agreement. At September 30, 2011 this note was paid in full.

On March 18, 2011, Capstone Industries, entered into a Purchase Order Funding agreement with Phyllis Postal. Mrs. Postal is a mother of a director of the company. This agreement provides for loans from the director up to $300,000, with a due date of December 31, 2011, carries a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale thereof (second position to Sterling Capital Funding). As of September 30, 2011 the Company received $300,000 pursuant to the agreement. As of September 30, 2011 this loan was paid in full

On March 23, 2011, the Company entered into a Purchase Order Funding agreement with Rossion Holding LLC (RHL). The agreement provides for loans up to $65,000, with a due date of Aug 23, 2011, carries a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale of thereof (second position to Sterling Capital Funding). As of June 30, 2011 this note was paid in full.

On May 27, 2011, the Company entered into a Purchase Order Funding agreement with Everett Fleisig. The agreement provided for loans up to $315,000, with a due date of December 31, 2011, carried a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale of thereof (second position to Sterling Capital Funding). As of December 31, 2011 the note was paid in full.

On June 17, 2011, Capstone Industries, entered into a Purchase Order Funding agreement with a director. This agreement provides for loans from the director up to $316,000, with a due date of December 31, 2011, carries a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale thereof (second position to Sterling Capital Funding). As of September 30, 2011 the note was paid in full.

On May 17, 2011, the Company entered into a Purchase Order Funding agreement with Rossion Holding LLC (RHL). The agreement provides for loans up to $831,000, with a due date of October 31st, 2011, carries a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale of thereof (second position to Sterling Capital Funding ). As of September 30, 2011 the note was paid in full.

On June 22, 2011, the Company entered into a Purchase Order Funding agreement with Rossion Holding LLC (RHL). The agreement provides for loans up to $585,000, with a due date of October 31st, 2011, carries a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale of thereof (second position to Sterling Capital Funding). At September 30, 2011, no funding was required, and the note was closed.

Stewart Wallach, the Company’s Chief Executive Officer and President, is a 65% owner of Rossion Holding LLC.

On December 17, 2010, the Company entered into a Purchase Order Funding agreement with George Wolf. Mr. Wolf is a business partner of the CEO and an officer of the company. The agreement provides for loans up to $392,000, with a due date of June 30, 2011, carries a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale of thereof (second position to Sterling Capital Funding ). At December 31, 2010 the note payable was $38,187 includes accrued interest of $187 which was paid in full as of March 31, 2011. During the first quarter additional $156,000 advance was received on this note. During the second quarter additional $100,000 advance was received on this note. As of June 30, 2011 this note was paid in full.

On February 11, 2011, the Company entered into a Purchase Order Funding agreement with George Wolf. The agreement provides for loans up to $106,000, with a due date of Aug 30, 2011, carries a simple interest rate of 1.5% per month (18% annual), and is secured by the product purchased and accounts receivable from the sale of thereof (second position to Sterling Capital Funding). As of December 31, 2011 the note payable was zero and the note is closed.

Based on the above, the total amount payable to officers, directors and related parties as of December 31 , 2011 and December 31, 2010 was $1,531,215 and $2,221,457, respectively, including accrued interest of $82.019 and $57.927, respectively. The maturities under the notes and loan payable to related parties for the next five years are:

Year Ended December 31,
2012	$	0
2013		1,531,215
2014		-
2015		-
2016
Total future maturities	$	1,531,215